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12/10/2018 <br />lawfully in the City or is operating unlawfully. The City's acceptance of a cannabis <br />business tax payment from a cannabis business operating illegally will not <br />constitute the City's approval or consent to such illegal operations. <br />B. The initial rate of the cannabis business tax shall be as follows: <br />1. For every person who engages in commercial cannabis cultivation as a <br />nursery shall be subject to two and half percent (2.5%) of gross receipts. <br />2. For every person who engages in the retail sales of cannabis or cannabis <br />products as a retailer (dispensary) or non -storefront retailer (delivery <br />business) or microbusiness (retail sales activity) shall be subject to four <br />percent (4%) of gross receipts. <br />3. If and when the City Council, by ordinance, takes action to allow commercial <br />cultivation other than as a nursery, every person who engages in <br />commercial cannabis cultivation other than as a nursery shall be subject to <br />two and half percent (2.5%) of gross receipts. <br />4. If and when the City Council, by ordinance, takes action to allow operation <br />of a testing laboratory for cannabis or cannabis products, every person who <br />engages in the operation of a testing laboratory for cannabis or cannabis <br />products shall be subject to one percent (11%) of gross receipts. <br />5. If and when the City Council, by ordinance, takes action to allow a cannabis <br />distribution business for cannabis or cannabis products, every person who <br />engages in a cannabis distribution business for cannabis or cannabis <br />products shall be subject to two percent (2%) of gross receipts. <br />6. If and when the City Council, by ordinance, takes action to allow cannabis <br />manufacturing, processing, or microbusiness (non -retail activity), or any <br />other type of cannabis business not described in Section 32.806(B) (1), (2), <br />(3)(a), 3(b), or 3(c) and for which a state license is required under Business <br />and Professions Code Sections 26000 et seq., every person who engages <br />in such cannabis business shall be subject to two and half percent (2.5%) <br />of gross receipts. <br />7. Every person who engages in any other type of cannabis business not <br />described in Section 32.806 (B) (1), (2), (3), (4), (5) or (6): shall be subject <br />to two and half percent (2.5%) of gross receipts. <br />C. The City Council may, by resolution or ordinance and without voter approval, adjust <br />the rate of the cannabis business tax. However, in no event may the City Council <br />set any adjusted rate that exceeds the maximum rate calculated pursuant to <br />Section 32.806 (D) for the date on which the adjusted rate will commence. <br />ATTY/ORD.473/RC CANNABIS TAX ORDINANCE <br />REV: 07-18-18 VR <br />Page 6 of 16 <br />ORDINANCE NO. 2461 <br />MUFF NO. 305 <br />